TORONTO, ONTARIO (August 11, 2022) – Today, Park Lawn Corporation (TSX: PLC; PLC.U) (“PLC”, “Park Lawn”, or the “Company”) announced its results for the second quarter (“Q2”) ended June 30, 2022:
“As the death rate normalized over the second quarter, we experienced a meaningful decrease in national mortality which affected our cemetery operations more significantly than our funeral homes. Specifically, we saw a decrease in our at-need cemetery sales as a direct result of the decrease in the death rate and, related thereto, a decrease in pre-need property sales in certain of our businesses. In connection with this expected pull-back, we worked to leverage our position in the markets in which we operate through pricing adjustments, as well as through expense control although the current inflationary environment yielded less impactful results than anticipated,” said J. Bradley Green, Chief Executive Officer of PLC.
Mr. Green continued, “Although we recognize that the operating results of this quarter look different than our most recent COVID impacted comparison, it is important to look at our performance and our business over the long-term as we continue to see market share growth, improvement in our integrated businesses, and a robust acquisition pipeline which will result in greater returns over the long-run. As we continue to add higher quality premier operating firms, we have seen a substantial increase in the impact that these acquired businesses have on our portfolio and expect that this will continue to provide greater benefit as we move forward.”
Highlights from Q2 2022
- For the three-month period ended June 30, 2022, net revenue increased by 5.4% to $75,921,525, compared to the three-month period ended June 30, 2021. Revenue growth was supported by strong sales at the Company’s Acquired Operations2, which increased by $9,573,718. However, revenue growth from Comparable Operations decreased by $5,055,834, primarily due to decreases in property sales in certain cemetery businesses.
- Net earnings attributable to shareholders of PLC (the “Shareholders”) remained flat and was $5,807,886 for the three-month period ended June 30, 2022, compared to $5,807,870 for the three-month period ended June 30, 2021.
- Net earnings margin for the three-month period ended June 30, 2022 was 7.6% compared to an 8.1% margin for the three month period ended June 30, 2021.
- Diluted net earnings per Common Share to Shareholders decreased by $0.025 or 13.0% for the three-month period ended June 30, 2022, compared to the three-month period ended June 30, 2021.
- Diluted Adjusted Net Earnings per Common Share to Shareholders decreased by $0.101 or 34.7% for the three-month period ended June 30, 2022, compared to the three-month period ended June 30, 2021.
- Adjusted EBITDA to Shareholders decreased by 15.8% to $15,605,747 for the three-month period ended June 30, 2022, compared to the three-month period ended June 30, 2021.
- Adjusted EBITDA margin for the three-month period ended June 30, 2022 was 20.6%, a 520 bps decrease over the comparable period in 2021.
- As at June 30, 2022, the Company’s Leverage Ratio was 1.09x, and inclusive of the Company’s outstanding debentures was 1.95.
- At June 30, 2022, the Company had $90,456,053 outstanding on the Credit Facility (as hereinafter defined) including letters of credit and an undrawn balance of $149,543,947.
- Subsequent to the quarter, on July 12, 2022, the Company entered into an amendment to its credit facility which, in addition to providing additional flexibility in its capital structure, transitioned the borrowing capacity from CAD$300 million to USD $240 million and extended the maturity date to August 31, 2027.
PLC Strategically Executes on its Acquisitions and Organic Growth Strategies
- During the quarter, the Company deepened its presence in Mississippi by completing the acquisition of Chancellor Funeral Home and Garden of Memories consisting of one stand alone funeral home and one on-site funeral home and cemetery combination located in Florence, Mississippi and Byram, Mississippi, respectively. The Company also completed the acquisition of Hudson Funeral Home & Cremation Services a business consisting of one stand-alone funeral home located in Durham, North Carolina.
- Subsequent to June 30, 2022, the Company entered into a new high growth market in Abingdon, Virginia by acquiring Farris Funeral Service, Inc. and Affiliated Service Group, Inc. a business consisting of one stand alone funeral home and one on-site funeral home and cemetery combination. In addition, the Company also announced its intention to expand its Tennessee presence into the western half of the state by acquiring substantially all of the assets of the Shackelford Corporation, a group of businesses consisting of eight stand-alone funeral homes, two stand-alone cemeteries and one on-site funeral home and cemetery located in and around the Savannah, Tennessee area. The transaction is anticipated to close in early September 2022 following the receipt of regulatory approval.
- Also subsequent to the quarter end, PLC completed and opened the Westminster Funeral, Visitation and Reception Centre at Westminster Cemetery in Toronto, Ontario.
PLC Announces Appointment of New Directors to the Board of Directors
The Company also announced the appointment of two new directors to its Board of Directors (“Board”) John A. Nies and Elijio V. Serrano to replace Paul G. Smith and Amy Freedman, who have tendered their resignations. In addition, Deborah Robinson has been named Chair of the Board.
“We are pleased to welcome John and Elijio as new directors to the Park Lawn Board,” said Deborah Robinson, Chair of the Board. “We look forward to their diverse skills, perspectives and expertise contributing to the ongoing success of Park Lawn. Their addition to our team aligns with the Board’s desire to include a greater representation of U.S. based directors and Park Lawn’s commitment to ongoing board refreshment to ensure a strong balance of qualifications, experience, diversity and tenure.”
“On behalf of the entire Board and the management team, I thank Paul for his invaluable input, contributions and incredible commitment to Park Lawn over the many years of his service,” said Deborah Robinson. “We are appreciative of Paul’s ongoing support over the coming weeks to transition the Chair role. We are grateful for Paul and Amy’s contributions to Park Lawn and wish them the best.”
John A. Nies
Mr. Nies is a Managing Partner of JMH Capital, a private equity firm based in Boston. He has been investing in private equity since 2000 and has spent his entire career helping companies grow and become more profitable in a variety of operating and advisory capacities. Prior to JMH, Mr. Nies was a Managing Director–Operations at Parthenon Capital where he was responsible for deal evaluation, due diligence, and the successful development of portfolio companies. Following its initial public offering, Mr. Nies was a director of Kenexa, a company listed on the New York Stock Exchange, where he served as its Lead Independent Director, as well as a member of its audit and governance committees, prior to its acquisition by IBM in 2012.
Before joining Parthenon Capital, Mr. Nies was a founding member and Managing Director of The Parthenon Group, a management consulting firm founded in 1991, where he advised CEOs of Fortune 500 companies as well as smaller companies in over 30 industries. Between 1991 and 2000, Mr. Nies contributed to Parthenon’s successful growth from 5 to 100 professionals, with offices in Boston, London, and San Francisco. While in consulting, Mr. Nies’ area of expertise was competitive strategy development, including performance assessment, M&A, operations improvement, and acquisition integration.
During the course of his career in private equity, Mr. Nies has served in a variety of operating capacities in portfolio companies; most recently, he served as the transitional CEO and Executive Chairman of Service Radio Rentals for 18 months prior to placement of JMH’s permanent operating executive. Mr. Nies started his career at Bain & Co. in Boston.
Mr. Nies earned a Bachelor of Arts from Dartmouth College, summa cum laude, and a Masters of Business Administration, with distinction, from Harvard Business School. He currently serves on the Board of Directors of multiple JMH portfolio companies.
Elijio V. Serrano
Elijio V. Serrano has served as the Senior Vice President and Chief Financial Officer of TETRA Technologies Inc., a company listed on the New York Stock Exchange, since August 2012. He also served as Chief Financial Officer and as a director of CSI Compressco LP, a Nasdaq listed company, from 2017 to 2021. Mr. Serrano served as chief financial officer of UniversalPegasus International, a global project management, engineering and construction management company, from October 2009 through July 2012.
Prior to his time with UniversalPegasus, he held numerous leadership positions at Paradigm BV, EGL, and Schlumberger. Mr. Serrano also served as director, chairman of the audit committee, and as a member of the corporate governance and nominating committee of Tesco Corporation, a Nasdaq-listed company, until its acquisition by Nabors in December 2017.
Mr. Serrano received his B.B.A. degree in Accounting and Finance from the University of Texas at El Paso. Mr. Serrano was a certified public accountant in the State of Texas from 1986 until March 2002.
PLC Investor Day 2022
PLC will host an Investor Day on Thursday, September 29, 2022, in Nashville, Tennessee. The event will be held in-person at the JW Marriott, located at 201 8th Avenue, beginning at 9:00 a.m. CST and is expected to conclude by approximately 11:00 a.m. CST. Additionally, following the event, PLC will host a tour of one of its premier funeral and cemetery locations for interested parties.
Registration for the 2022 Investor Day is required, as well as for the site tour. Investors can register for the event online at https://www.parklawncorp.com/investor-day-2022/ or by calling PLC at (281) 453-2109. PLC has secured a limited number of rooms at the JW Marriott for attendees. Hotel reservation details will be provided upon registration for the event and the deadline for making hotel reservations is August 26, 2022.
For those unable to attend in person, a live webcast will be broadcast and a replay of the event, as well as supplemental materials, will be available on PLC’s website following the event.
PLC Relocates its Canadian Headquarters
The Company relocated its Toronto registered office to 2 St. Clair Avenue East, Suite 705, Toronto, ON M4T 2T5, effective as of July 1, 2022.
The Company will host a conference call to discuss its second quarter 2022 financial results on Friday, August 12, 2022. Details are as follows:
Date: Friday, August 12, 2022
Time: 9:30 a.m. EST
Dial-in Number: Toll Free (888) 506-0062 | Conference ID: 800347
To ensure your participation, please join approximately five minutes prior to the scheduled start of the conference call. The Company’s complete financial results can be found at www.sedar.com or on the Company’s website at www.parklawncorp.com.
A replay of the conference call will be available until Friday, August 26, 2022 and can be accessed as follows: Dial-in Number: (877) 481-4010, Conference ID: 46187. Alternatively, the conference will also be available on the Company’s website at www.parklawncorp.com.
About Park Lawn Corporation
PLC provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). PLC and its subsidiaries own and operate businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. PLC operates in three Canadian provinces and seventeen U.S. states.
Adjusted Net Earnings, Adjusted EBITDA and their related per share amounts, Adjusted EBITDA margins, Acquired Operations and Comparable Operations are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Such measures are presented in this news release because management of PLC believes that such measures are relevant in evaluating PLC’s operating performance. Such measures, as computed by PLC, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to similar measures reported by such other organizations.
The Company defines Acquired Operations as business units or operating locations acquired by the Company during the period from January 1, 2021 and ending June 30, 2022. The Company defines Comparable Operations as business units or operating locations owned by the Company for the entire period from January 1, 2021 and ending June 30, 2022. The following tables indicate how the Company reconciles Adjusted Net Earnings, Adjusted EBITDA and their related per share amount, and Adjusted EBITDA margins to the nearest IFRS measure.
Adjusted Net Earnings
EBITDA and Adjusted EBITDA
Adjusted Net Earnings
EBITDA and Adjusted EBITDA
Cautionary Statement Regarding Forward‐Looking Information
This news release contains forward-looking statements within the meaning of applicable securities laws relating to the business of PLC and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “aspirational”, “project”, “expect”, “intend”, “plan”, “will”, “may”, “estimate”, “pro-forma” and other similar expressions. These statements are based on PLC’s expectations, estimates, forecasts and projections and include, without limitation, statements regarding: PLC’s expectations regarding its returns over the long-run and the impact that its acquisition program and continuing focus on premier operating firms will have on its portfolio; PLC’s expectation that the Shackelford acquisition will close in early September, 2022; and the impact of COVID-19 on the Company’s business. The forward-looking statements in this news release are based on certain assumptions, including that regulatory restrictions relating to the COVID-19 pandemic in the markets the Company serves will continue to be relaxed through the 2022 calendar year, the CAD to USD exchange rate remains consistent, PLC is able to obtain regulatory approval or satisfy regulatory requirements for the Shackelford acquisition, the Shackelford acquisition closes in the anticipated timeframe, the Shackelford acquisition will perform as expected following closing, PLC will be able to implement business improvements and cost savings, PLC will be able to retain key personnel, there will be no unexpected expenses occurring as a result of contemplated acquisitions, multiples remain at or below levels paid by PLC for previously announced acquisitions, the acquisition and financing markets remain accessible, capital can be obtained at reasonable costs and PLC’s current business lines operate and obtain synergies as expected, as well as those regarding present and future business strategies, the environment in which PLC will operate in the future, any adjustments to operations with the ongoing COVID-19 pandemic, expected revenues, expansion plans and PLC’s ability to achieve its goals.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, risks associated with the current COVID-19 pandemic, risks associated with the impact of inflation on PLC’s business, risks associated with the conflict between Russia and Ukraine, including from the economic sanctions imposed or to be imposed as a result thereof, and supply chain disruptions resulting therefrom, and the other factors discussed under the heading “Risk Factors” in PLC’s most recent Annual Information Form and most recent Management’s Discussion and Analysis available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, PLC assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Chief Financial Officer
(416) 231-1462, ext. 221
 Adjusted Net Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Earnings per share-diluted are non-IFRS financial measures. Refer to the Non-IFRS Financial Measures section of this document for more information on each non-IFRS financial measure.
 Acquired Operations and Comparable Operations are a non-IFRS financial measures. Refer to the Non-IFRS Financial Measures section of this document for more information on each non-IFRS financial measure.